Digital Transformation Lags Davos Predictions, Studies Show

The tech stuff can wait. It's lining up the talent that matters most.

People look into a booth for augmented reality on the opening day of the 48th annual meeting of the World Economic Forum in Davos, Switzerland, Jan. 23, 2018.
Photo:
European Pressphoto Agency

The 48th World Economic Forum, an annual gathering of the world’s foremost business and political leaders, meets this week in Davos, Switzerland. The conference’s agenda is a roadmap to key digital transformation technologies empowering the “Fourth Industrial Revolution,” a disruptive economic and societal concept introduced at the event in 2013, predicated on the confluence of physical, digital and virtual technologies. Five years later, however, rather than embrace digital transformation, few firms have deployed comprehensive strategies to deal with it.

That is a key finding of Dell Technologies’ “2017 Digital Transformation Index,” a global study fielded among 4,000 “business leaders,” including chief information officers. “The revolution is already here; business leaders see a chaotic, uncertain future ahead,” proclaims the report’s executive summary. How chaotic? Seventy-eight percent of respondents say their companies “feel threatened by digital startups; 73 percent confess digital transformation could be more widespread at their firm; 48 percent don’t know what their industry will look like in three years and 45 percent fear their company may become obsolete in three to five years.” Sounds like a call to action, right?

Asked by Dell Technologies to describe their company’s state of digital transformation, 15 percent confess their firm is a “digital laggard”, 32 percent are content to be “digital followers” while 34 percent claim they are “digital evaluators.” Only 14 percent have even “adopted” a digital strategy while a miserly 5 percent classify their company as a “digital leaders.”

A report from HCL Technologies, a global technology services firm, contains similar findings. Anand Birje, corporate vice president at HCL Technologies says, “as firms move off of sporadic and proof of concepts project, one of the biggest findings of this study was the gap between strategy and execution, as well as measurable outcomes." He noted that only 10 percent of businesses have "a full deployment plan.”

As digital leaders pull away from competitors, and McKinsey’s “topple rate”– the pace at which firm’s lose their leadership position - continues to accelerate, pressure to frame and implement a digital transformation strategy will become a priority for most chief information officers. Getting started, a knee-jerk reaction might be to focus attention on the digital capabilities of technologies like artificial intelligence, robotics, big data and blockchain.

That is putting the cart before the horse.

Dr. Klaus Schwab, co-founder of the World Economic Forum, advises business executives to begin digital transformation efforts with an investment in people. He says, “I argue we have moved from capitalism to talentism. The most decisive factor of production and innovation is human capital and talent. The key challenge we face today is how to make sure everyone can become a talent and has the necessary skills.”

But digital talent development is not a strategic priority for many companies. A recent research study funded by Cap Gemini, a consulting services firm, and LinkedIn states “although the majority of companies discuss the digital talent gap, concrete action to bridge it is rarely taken. Close to 50 percent of corporations have not taken digital talent seriously.”

“1) a lack of visibility and long term planning around concrete skill and talent needs, 2) incredible inertia and adherence to old-school hiring practices that look for new skills in conventional places and 3) a tendency to place misplaced hope that higher education and workforce development can somehow solve this problem."

What results, according to Mr. Schwartz, is a “zero sum game where one company poaches a top talent from another.”

A coherent digital transformation talent strategy needs two components: one that focuses on legacy talent and another for new technology. There are volumes of data on legacy technology talent. Not much has changed in 20 years. CompTIA, an industry association, reports the latest most difficult legacy positions to onboard are application software developers, computer system analysts and project managers.

Hiring for advanced digital technology jobs is more elusive. The “2017 Skills Index” from Upwork, a Mountain View, Calif. freelance job platform service, provides a roadmap to future technology skill sets. The list of 20 jobs contained in the index is a “canaries in the coal mine” compilation of positions chief information officers will be hard pressed to hire for in the future. Blockchain technology is prominently featured in the index.

Science fiction author William Gibson once said, “the future is already here – it is just unevenly distributed.” To ensure their firms – and their careers – are counted among the future distribution curve of winners and survivors in the Fourth Industrial Revolution, chief information officers must start now to frame out digital transformation strategies. The core component of those strategies must be the acquisition, and retention, of top digital talent.

The tech stuff can wait.

Gary J. Beach is former publisher of CIO Magazine and author of “The U.S.Technology Skills Gap”. Reach him at garybeachcio@gmail.com or follow him on Twitter @gbeachcio.

CORRECTION: Anand Birje is a corporate vice president at HCL Technologies. An earlier version of this story misspelled Mr. Birje's name.